Peak Sport Products : Documents on display - (009) Letter from the Independent Board Committee

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PEAK SPORT PRODUCTS CO., LIMITED

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(Incorporated in the Cay,nan Islands with li1nited liability)

(Stock Code: 1968)

lv!enzbers of the Independent Board Conunittee:

Dr. XIANG Bing Mr. FENG Lisheng Mr. ZHU Haibin

Registered office:

Cricket Square, Hutchins Drive

1. Box 2681

   Grand Cayman KYI-l l l l Cayman Islands

   23 September 2016

   To the Independent Shareholders and Optionholders

   Dear Sir/Madam,

   PROPOSED PRIVATISATION OF PEAK SPORT PRODUCTS CO., LIMITED BY THE OFFEROR

   BY WAY OF A SCHEME OF ARRANGEMENT (UNDER SECTION 86 OF THE COMPANIES LAW)

   We have been appointed by the Board as the Independent Board Committee to give a recommendation to the Independent Shareholders and Optionholders in respect of the Proposal. the Scheme and the Option Offer, respectively, details of which are set out in "Part IV - Letter front the Board" and "Part VII - Explanatory Memorandum" of this Scheme Document. Tenns defined in this Scheme Document sha11 have the same meanings in this letter unless the context other,vise requires.

   Gram Capital, the Independent Financial Adviser, has been appointed with our approval, to advise us in connection ,vith the Proposal, the Scheme and the Option Offer. The details of its advice and recom1nendations and principal factors taken into consideration in aniving at its recommendations are set out in "Part VI - Letter from Gram Capital" of this Scheme Docun1ent.

   In the letter from Gram Capital set out in Part VI of this Scheme Document, Gram Capital states that it considers the te1ms of the Proposal, the Scheme and the Option Offer to be fair and reasonable and recon1n1end the Independent Board Co1nnlittee to advise the Independent Shareholders to vote in favour of the relevant resolutions to be proposed at the Court Meeting and EGM to approve and implement the Scheme, and the Optionholders to accept the Option Offer.

   The full text of the letter from Gram Capital is set out in Part VI of this Scheme Document.

   The Independent Boarrl Committee, having considered the terms of the Proposal, the Scheme and the Option Offer, and having taken into account the opinion of Gram Capital, and in particular the factors, reasons and recommendalions sel out in ils Ieuer in Part VI of lhis Schi::me Docu,nent, considers lhal the

   terms of the Proposal, the Scheme and the Option Offer arc fair and reasonable as far as the Independent Shareholders are concerned,

   Accordingly, the Independent Board Comn1ittee recommends:

2. the Independent Shareholders to vote in favour of the Scheme al the Court Meeting;

(b) the Independent Shareholders to vote in favour of the special resolution to approve and give effect to the reduction of the share capital of the Co1npany by cancelling and extinguishing the Scheme Shares and the ordinary resolution to immediately thereafter increase the issued share capital of the Company to the amount prior to the cancellation of the Sche1ne Shares and apply the reserve created as a result of the aforesaid cancellation of the Scheme Shares to pay up in full at par such number of new Shares as is equal to lhe nun1ber of Scheme Shares cancelled as a result of the Scheme, credited as fully paid, for issuance lo the Offeror at the EGM and

(c} the Optionholders to accept the Opti on Offer.

The Independent Board Couuniltee draws the atlention of lhe Independenl Shareholders to (i) the Icucr from Lhe Board set out in Part IV of the Scheme Document; (ii) the letter from Gram Capital, the Independent Financial Adviser, which sets out the factors and reasons taken into account in arriving at its recommendation to the Independent Board Comrniuee, set out in Part VI of this Scheme Document; and (iii ) the Explanatory Memorandu1n set out in Part VII of this Scheme Document.

XIANG Bing

l11depe11dent 1uflr-executil•e

Director

Yours faithfully FENG Lisbeng

lndepe.11de11t non-executive

Director

independent Board c:0111,nittee

ZHU Haibin

Independent non-executive

Director

The Independent Board Committee, having considered the terms of the Proposal, the Scheme and the Option Offer, and having taken into account the opinion of Gram Capital, and in particular the factors, rensons and recommendations set ouL in its letter in Part VI of thfs Scheme Documenl, considers lhat the terms of the Proposal, the Scheme and the Option Offer are fair nnd reasonable as far as the: Independent Shareho]ders are concerned. Accordingly, the Independent Board Comn1ittee recommends:

1. the Independent Shareholders to vote in favour of the Scheme at the Court Meeting;

2. the Independent Shareholders to vote in favour of the special resolution to approve and give effect to the reduction of the share capital nf the Company by cancel!ing and extinguishing the Scheme Shares and the ordinary resolution to immediately thereafter increase the issued share capital of the Company to the amount prior to the cancellation of the Scheme Shares and app}y the reserve created as a result of the aforesaid cancellation of the Scheme Shares to pay up in full at par such number of new Shares as is equal to the number of Scheme Shares cancelled as a result of tl1e Scheme, credited as fully paid, for issuance to the Offeror at the EGM; and

3. the Optionholders to accept the Option Offer.

The Independent Board Committee draws the attention of the Independent Shareholders to (i) the letter from the Board set out in Part IV of the Scheme Document; (ii) the letter from Oram Capital, the Independent Financial Adviser, which sers out the factors and reasons taken into account in arriving nt its recommendation to the Independent Board Committee, set out in Part VI of this Scheme Document; and (iii) the Explanatory Memorandum set out in Part VIl of this Scheme Document.

XIANG Bing

b1depe11de11t ,ion·executive Director

Yours faithfully FENG Llsheng

Independent 11011·exec11rive

Director

ZHU Haibin

hulependent non-executive

Direcr..or

The Independent Board Committee, having considered the terms of the Proposal, the Scheme and the Option Offer, and having taken into account the opinion of Gram Capital, and in particular tJ1e factors, reasons and recommendations sel out in its letter in Part VI of this Scheme Document, considers that the terms of the Proposal, the Scheme and the Option Offer arc fair and reasonable as far as the Independent Shareholders are concerned.

Accordingly, the Independent Board Comn1ittee recommends:

1. the Independent Shareholders to vote in favour of the Scheme at the Court Meeting;

2. the Independent Shareholders to vote in favour of the special resolution to approve and give effect to the reduction of the share capital of the Company by cancellillg and extinguishing the Scheme Shares and the ordinaiy 'resolution to immediately thereafter increase the issued share capital of the Company to the amount prior to the cancellation of the Scheme Shares and apply the reserve created as a result of the aforesaid cancellation of the Scheme Shares to pay up in full at par such number of new Shares as is equal to the number of Scheme Shares cancelied as a result of the Scheme, credited as fully paid, for issuance lo tl1e Offerer at the EGM; and

3. the Oplionholders to accept the Option Offer.

The Independent Board Committee draws the aUention of the Independent Shareholders lu (i) the letter from the Board set out in Part IV of the Scheme Document; (ii) the letter from Gram Cnpilnl, the Independent Financial Adviser, which sets out the factors and reasons taken into account in arriving at its recommendation to the Independent Board Committee, set out in Part VI of this Scheme Document; and (iii) the Explanatory Memorandum set out in Part VII of this Scheme Document.

XIANG Bing

In,lepe11de1it ncin-exccutive Director

Yours faithfully

FENG Lisbeng

Independent no11-exec11tive

Director Independent Board Co11u11ittee

ZIIU Haibin

hukpe11dent. 11on-exec111b,e